FUTURES Share-index contracts end week with a jump

Press, 21 February 1987, Page 27

FUTURES Share-index contracts end week with a jump

Share-index futures ended the week with a 66point rise in the March contract yesterday to 3064, compared with 3170 at the previous Friday finish.

Barclay’s index rose 35.73 points to 3154.88. The March futures were at discount of 2.8 per cent to the physical. Mr Geoff McDonnell, futures manager of Mair Astley, Ltd, said their bargain hunters returned to support quality stocks after the sharemarket had been sold down early in the week.

“As a result the futures index fell to 2880 and then recovered. We feel the recovery is temporary and suggest that those favouring longs (buying positions) exercise caution.” Miss Jenny Chin, of Marshall Futures, said the Barclay’s index tumbled from an open on Monday of 3143 to 3043 on Tuesday, but bargain hunters buying blue-chip stocks had the index back at 3120 on Thursday.

“Futures mirrored this movement opening at 3151 on Monday, tumbling to a low of 2880 on Tues-

day on stop lossing, only to see a firming on the index for the rest of the week with futures closing near its highs of the week.

“Sentiment is still to sell futures but physicals would have to continue its downward slide before selling becomes aggressive again,” Jenny Chin said. Nearly 2500 contracts were traded for the week. Interest rates Government stock futures dipped sharply. The March contract closed 22 points under the Thursday close. April was one point down, and June was 20 points lower. Mr McDonnell said the bears had taken control of the market because of negative funding of bonds, a belief that interest rates would remain firm, and a general feeling that the short-term outlook for the economy was not good. Jenny Chin said that “stop lossing into unchartered territory” this week saw Government stock futures fall from 8247 to 8204 where, profit takers supported the market.

"Bearish sentiment has certainly taken a hold of the market but technically th® market appears over-sold and a correction of this low level could be possible. With the March tax take still to come, there will be very little real buying interest to hold long term.”

Futures traded about 3700 contracts, with a face value of S37OM. Ninety-day bank-accepted bills were mixed. March closed 29 points down, but June was 10 points firmer.

The move in the bankaccepted bills contract had paralleled the call market fluctuations, Mr McDonnell said. The fall in the call rate sparked a short-lived rally on futures to 7650 in the March contract. “However, reality returned to the market with sellers en masse once it was realised the fall in the call rate was temporary.”

Bank bills traded between 7670 to 7550 in a more erratic fashion than Government stock, reflecting movements of the call'market, said

Jenny Chin. The trend had been progressively down, with buyers again on the receiving end. As with Government stock, primary liquidity and the outlook for cash flow after the March tax take would determine the next direction for interest rates. About 460 contracts were traded during the week, with a value of S23OM. U.S. dollar

U.S. dollar futures closed 35 points down at 1.8275, reflecting the strength of the kiwi dollar.

Mr McDonnell said that with interest rates firm and new bond issues creating buying pressure on the kiwi dollar, he’expected the kiwi to trade at UU50.5450 to 5U50.5550, “with more potential for an upside break-out” The suggestion is to open shorts (selling position) on U.S. dollar futures.

Jenny Chin said yankeekiwi issues released this week combined with high interest rates and short covering drove the kiwi through 5U50.5450 on the Foreign Exchange Market It touched $U50.5510 before sellers entered.

The withdrawal of a SIOOM yankee-kiwi on Friday also put selling pressure on the currency driving the unit to a support level around $U50.5480.

“With interest rates still on the rise, the kiwi currency will have support between $U50.5400 and $U50.5450. Upside potential from hehe is

still favoured, with $U50.5500 as a strong upside resistance level.” Wool Wool futures had a quiet week, most activity centring on short covering. “However, we see the upside being fairly limited, especially if the kiwi dollar continues to rise,” said Mr McDonnell. “A further strengthening of the kiwi dollar will make the market susceptible to a selloff now that a premium of 60c to 70c exists in the far months over the spot price.” Membership The Futures Exchange has announced that Guthrie Allison Cherrie Securities, Ltd, has been elected to trading membership of the exchange. This follows the transfer of trading membership from G. Modiano (NZ), Ltd, of Napier, one of the founding members of the exchange. Guthrie, Allison Cherrie Securities is jointly owned by the futures ■ brokers D. L. Guthrie and Sons, Ltd, of Auckland, and Australasian Breeding Stables, Ltd (soon to be re-named the Strathmore Group). There are 17 trading members of the exchange and 20 affiliate members. Sydney

March all-ordinaries contracts closed at 1588.5 (23

points up) on the Sydney Futures Exchange. • JUS CONTRACTS Mth Open H/L Last Vol Mar 1.8260 8275/1255 8275 7 g Contracts traded: 7. Open positions at Feb 19 Mar 230, Apr 2, May 6, Jun 1, total 239 (up 8). COMMERCIAL BILLS Mth Open H/L Last Vol Mar 7510 510/510 510 15 Contracts traded: 15. Open positions at Feb 19 Mar 328, Jun 13, Sep 43, Dec 40, Mar 39, Jun 10, total 583 (down 1). GOVERNMENT STOCK Mth Open H/L Last Vol Mar 8216 217/217 197 769 Apr 8278 278/233 233 40 Jun 8257 257/240 244 117 Contracts traded: 926. Open positions at Feb 19 Mar 2245, Apr 2, Jun 838, total 3085 (down 59). WOOL Mth Open H/L Last Vol Mar 586 586/586 586 3 Aug 633 633/633 633 2 Oct 638 638/638 638 1 Contracts traded: 6. Open positions at Feb 19 Mar 124, May 334, Aug 201, Oct 178, Dec 132, Jan 214, Mar 196, May 105, Aug 10, total 1494 (same). WHEAT Contracts traded: nil. Open positions at Feb 19 Mar 36, May 13, total 49 (down 2). M-DAY BANK BILLS Mth Open H/L Last Vol Mar 7585 600/550 550 65 Apr 7690 690/690 690 1 May 7840 840/800 800 11 Jun 7910 910/910 910 1 Contracts traded: 78. Open positions at Feb 19:: Mar 586, Apr 2, May 4, Jun 129, Sep 16, Dec 46, Mar 41, Jun 40, Sep 40, Dec 40, total 944 (down 12), BARCLAY’S SHARE INDEX Mth Open H/L Last Vol Mar 3035 064/000 064 544 Contracts traded: 544. Open positions at Feb 19: Mar 1092, Jun 52, total 1144 (down 14).

N.Z. FUTURES MARKET WEEK ENDED February 20 Trading Traded prices Total Open months This week To date this cont’s SUS High Low Last High Low week Mar ’87 1.8700 1.8225 1.8275 2.0120 1.8225 82 230 Apr ’87 1.8920 1.8920 1.8920 1.89201.8920 2 2 May '87 1.8930 1.8930 1.8930 1.89301.8930 6 6 Jun '87 Totals PCP — . — -*— -1.96601.9660 90 1 239 Mar ’87 7565 7500 7510 8500 7500 36 328 Apr '87 ' — — ■ — . — — —1 May ’87 — — 1 ■■■■ —I Jun ’87 — — 8520 7800 — 123 Sep ’87 — — —— 8525 7800 —■ 43 Dec ’87 —n — i — ——. 8500 7800 —- 40 Mar ’88 — — — 8500 7800 — 39 Jun ’88 — — Totals GOVERNMENT STOCK — 8450 8410 36 10 583 Mar ’87 8247 8197 8199 8445 8197 3009 2245 Apr ’87 8278 8233 8233 8318 8233 47 2 May ’87 ■— — . — — — ■ — Jun ’87 8300 8240 8244 8580 8240 808 838 Sep ’87 Totals WOOL — — 8436 8400 3864 3085 Meh ’87 595 586 586 605 480 45 124 May ’87 614 605 611 614 486 81 334 Aug ’87 635 628 633 635 532 42 201 Oct ’87 640 632 638 640 530 34 178 Dec ’87 642 635 637 642 541 30 132 Jan ’88 645 639 645 649 541 46 214 Meh ’88 647 640 647 647 551 • 25 196 May ’88 645 . 645 645 . 645 575 13 165 Aug ’88 Totals 656j’ 652 657 656 635 9 325 10 1494 Tenderable stock: 368 Wellington 20/2/87 WHEAT bales. 35F2D quotes — 573 in Feb ’87 — — kt —. 2290 2060 — 1 Mar ’87 2195 2180 2195 2330 2050 16 36 May ’87 2220 2220 2220 2350 2060 4 13 Jun ’87 — —— — 2150 2150 — — Jul ’87 —■ . — 2300 2100 — — Sep ’87 — — — 2400 Totals 90-DAY BANK ACCEPTED BILLS 2100 20 56 Mar ’87 7670 7550 7550 8120 7550 399 586 Apr ’87 7690 7690 7690 7690 7650 1 2 May ’87 7840 7800 7800 7850 7650 11 4 Jun ’87 7965 7900 7910 8160 7890 22 129 Sep ’87 — — 8150 7980 II 1 16 Dec ’87 8200 8200 8200 8275 8000 5 46 Mar ’88 — — — 8275 8000 — 41 Jun '88 ■■■■-« — 8275 8100 40 Sep ’88 — — — 8275 8100 40 Dec ’88 — — — Totals BARCLAY’S SHARE INDEX 8275 8100 438 40 944 Mar ’87 3151 2880 3064 3940 2880 2527 1092 Apr ’87 — — — 3250 3250 — I Jun ’87 Totals 3185 2960 2960 3746 2910 10 2537 52 1144